Any institution that holds cryptocurrency needs a secure method for storing its assets and processing payments. Cryptocurrency blockchain transactions are generally irreversible, so an error during either process could have serious consequences and costs.
Digital asset custody requires strong security, clear roles for employees, and clearly defined policies for every action involved in processing a transaction.
There are many crypto custody providers offering different ways to protect client assets. Some providers use Fireblocks technology for wallet security and transaction oversight. Fireblocks primarily offers MPC (multi-party computation) wallet infrastructure; Fireblocks Trust Company also provides regulated custody services in the United States. Other names in this market include Coinbase Custody, BitGo, Anchorage Digital, WhiteBIT Custody, and Gemini Custody. Each provider has its own model of Institutional Custody, along with different security technology, legal arrangements, and supported assets.
How MPC Wallets Work
A conventional crypto wallet relies on a private key to authorize access to digital assets. If someone steals the key, the cryptocurrency may be lost.
An MPC wallet handles the key differently. Control is divided into multiple cryptographic shares, which are then stored separately in more than one location. The complete private key is not created or kept in a single place. Several shares must work together before a transaction can be approved.
Splitting control in this way reduces the risk that one compromised person, device, or system will expose all of an institution’s digital assets. Fireblocks enables companies to use hot, warm, or cold MPC wallets, depending on what the company needs. BitGo and Coinbase also use advanced key management methods to protect assets and control transactions.
Set Clear Key Management Rules
Although key management is often treated as a technical issue, it also requires business rules. An institution must decide who can establish a new wallet, authorize an outgoing payment, or modify an account.
One employee might initiate a transfer request, while a second employee reviews and approves it. Certain high-value transfers may need approval from two or three people. Companies can also define limits for each user, asset, wallet, or transfer size.
It is important to maintain accurate records of every action performed through the system. An audit trail allows the company to identify who initiated a transfer, who authorized it, and when the funds were sent. Many custodial service providers, including Anchorage Digital and Gemini Custody, provide reporting tools and audit logs for this purpose.
Check Every Transaction Before Sending It
Before submitting a transaction to the blockchain network, an institution should check that it complies with its predetermined rules. Those rules may be based on the type of asset, its value, the originating wallet, or the destination address.
For instance, a rule could limit the maximum value of a transaction. Another could require approval from additional personnel before processing. A company may also restrict payments to a list of approved recipient addresses. By establishing and enforcing these rules, an institution can reduce losses caused by unauthorized or mistaken transactions.
MPC technology can significantly improve security around digital asset custody, but it does not provide complete protection against every threat. Institutions should also investigate a provider’s legal status, insurance coverage, account accessibility, reporting, customer support, and contingency planning for failures or downtime. Technology works best when institutions support it with clear procedures and review their security measures regularly.
This content is provided for informational purposes only and shall not be construed as financial, investment, trading, or any other form of professional advice. Nothing herein constitutes a recommendation or solicitation to engage in any transaction or investment activity.
Last Updated: September 3, 2026
